I'm Mad As Hell, And I'm Not Gonna Take It Anymore

to do a longer episode. But let's start simple. The term artificial intelligence is bastardized to the point it effectively means nothing and everything at the same time. When people hear AI, they think of an autonomous intelligence that can do things for them, and generative AI can do things for you, like generate an image or a text from

a simple prompt. As a result, it's easy to manipulate people who don't know much about tech, or even try it in the first place, into believing that this will naturally progress from It can create a bunch of text for me that I have to write for my job just by me typing in a prompt. Too, it can

do my job for me just by typing in a prompt. Basically, everything you've read about the future of AI extrapolates generative AI's ability to sort of generate something a human would make and turns it into a It can do whatever a human can do, or because some tech in the past has sometimes been bad at the beginning and linearly

improved as time drags on. This illogical thinking underpins the entire generative AI boom because we found out exactly how many people do not know what the fuck they're talking about and are willing to believe the last semi intelligent person that they talk to. Generatif AI is kind of a remarkable karner, just good enough version of human expression to get it past the gatekeepers in finance and the media, knowing that neither will apply a second gear of critical

thinking beyond hook as we'll do an AI now. The expectation that general IVAI will transform into this much more powerful version requires you to first ignore its existing limitations, believing it to be more capable than it is, and also ignore the fact that these models have yet to show meaningful improvement over the past few years unless you're looking, at course, at the benchmarks that they are built specifically

to pass. They still halluciname, they're still ungodly expensive to run, they're still unreliable, and they still don't really do that much. We're still chat GPT's growth as galvanized these people into believing that this is a legitimate, meaningful movement rather than the most successful public relation campaign of all time. Think of it like this, and some of you really don't like this argument is something couldn't be this big just because of the media.

they're cheating. You can't slap it on Google Assistant. That's unfair. What we're seeing here is one company taking most of the users and money available and doing so because the media fucking helped them. People aren't amazed by chat GPT.

The Man That Destroyed Google Search. I'm going to say that forever, and by the way, that's absolutely what you should listen to. It's wherebe award winning the best Business episode.

your requests. It should be how Google used to feel magical. Instead, Google search has become dramatically worse, mostly because the company's incentives change from help people find something on the web to funnel as much traffic and show as many add impressions as possible on Google dot Com. It does little annoying things like ignoring random words in the search string,

even though those words were there for a reason. And Google doesn't know better than you what you want ideally, though they should when it comes to a search product. That's ideally what you get someone to search something for you, You want them to bring back the best thing. And by this point, Google search should have been far more magical, more capable of taking a de witched question and turning it into a great answer. Would said answer being a

result from the internet right. Note that nothing I'm saying here is actually about generating a results. It's about processing a user's query and presenting an answer. The very foundation of computing and the thing that Google at one point was the best in the world at doing. Thanks to Propagar Ragavan, the former head of Ads that led a coup to become the head of Search, Google is pulled away from being the meaningful source of information on the Internet.

It really is actually quite sad when you think about it. And I'd argue that chat GPT filled the void left by Google Search by doing the thing that people wanted Google Search to do, answer a question even if the user isn't really sure how to ask it. Google Search has become clunky and messy, putting the burden of using the service on the user rather than helping fill the gap between a query and an answer in any meaningful way. Google's AI summaries don't even try to do what chat

GPT does. They just generate summaries based on search results and say, uh, mate, is this what you want? I don't fucking know? Only may I only mate latsambillion does a core give me a fucking break? But one though on Google's AI summaries, they're designed to answer a question rather than provide a right answer. There's a distinction that needs to be made here because it speaks the underlying

utility of search itself. One good illustration came earlier this week when someone noticed that you could ask Google to explain the meaning of a completely made up phrase and it would dutifully obey you. Two dry frogs in the situation, Google said, refer to a group of people in an awkward or difficult social situation. Not every insect has a mortgage, Google claimed, there's a humorous way of explaining that not everything is as it seems. But my favorite is, sorry,

I haven't read this bags. Big winky on the skillet bowl is apparently a slang TERWN that refers to a piece of bread with an egg in the middle.

just better at understanding a user's request than Google Search. Yes, I fundamentally believe, by the way, that five hundred million people a week could be using chat GPT as some sort of search replacement. And no, no, I do not believe that's a functional business model, in part because if it was chat gpt open AIE, they'd have a functional business. And to be clear, that's a load bearing kit because I know that five hundred million people aren't using chat GPT as a search replacement.

than Google to run as an a side. By the way, if you're wondering. No, open Ai cannot just create a Google Search competitor. Search GPT will be a significantly more expensive product to run at Google scale than Chat GPT, both infrastructurally and then the cost of revenue itself, with open ai being forced to create this massive advertising arm that does not exist. And by the way, another great critique I get is, like open Air, I can just hire a bunch of ads people. Why do you think

there hasn't been another competitor to Search? You realize that there are lots of other companies with lots of other money that could just do this, and indeed they've tried. Why do you think that hasn't worked. Is it because of the monopoly. It's because of the monopoly. It's because of the monopoly.

in the episode. I'm like a little flexible. I'm more all like limber and excited, and it also comes from a place of frustration. None of this AI stuff has ever felt substantive or real because the actual things that you can do with Generator IVAI never seemed to come close to the things that people are Sam Ortman and Warrio Aama Day seem to be promising, nor do they come close to the bullshit like people Casey Newton and

Kevin Ruster peddling. None of this ever resembled artificial general intelligence, and if I'm honest, very little it seems to even

suggest it's a functional industry. And when cynical plants like Kevin rus of the Times bumble around asking theoretical questions such as, do you think that there's a fifty percent chance or higher that AGI to find this an AI system that outperforms human experts, Eventually all cognitive tasks will be built before twenty thirty, I think when we're reading people saying that, and that was Kevin rus at like some little AI panel, things surrounded, but just like venture

capitalists and the senior officials of anthropic, when you've got like the lead columnist of the time saying this, we should all be terrified. We should be terrified, but not of AGI, but that the lead technic columnist that The New York Times appears to have an undiagnosed concussion. Rus's logic, as with Kate sin Newton's, is based on the idea that he's talked to a bunch of people that say, yeah, yeah, AGI is right around the corner, rather than any kind

of like tangible proof for evidence. Just line going up.

about it. His most egregious example of credulousness came in late April when he published this thinly veiled puff piece about what to do if AI models become conscious in the future. Now, this piece, this piece is possibly the dumbest tech piece I've read in my life. I really mean this. I've read some dog share, I've gone on telegram groups for the smallest icos you've seen in your life.

From then the rutger House speech from a blade runner right now, the things I've seen with your eyes different speech. I realize this piece from the New York Times is called if AI Systems become conscious, should they have rights? And the subhead is as artificial intelligence systems become smarter, one AI company is trying to figure out what to do if they become conscious. I'm going to give you exactly one guess what company he's talking about. And here's

a clue. It's the company Casey Newton's boyfriend WORKSAM. That's right, it's Anthropic. Kevin Ruse interviewed two people, both employed by Anthropic, with one holding the genuinely hilarious job description of AI welfare researcher, who said nakedly insane things like there's only a small chance, maybe fifteen percent or so, that Claude

or another AI system is conscious. And it seems that if you find yourself in a situation of bringing some new class of being into existence dot dot dart, then it seems quite prudent to at least be asking questions about whether that system might have its own kinds of experiences. Well, I'm experiencing brain damage reading this article out. And what makes this article so appalling is that Ruth acknowledges that this shit is seen by most level headed people as

utterly fantastical. He describes the concept of AI consciousness as a taboo subject and that many critics will see this as crazy talk, but doesn't bother to speak to any

actual critics. He does, however, speculate on the motives that said critics, saying that they might object to an AI company's studying consciousness in the first place because it might create incentives to train their systems to act more sentient than they actually are, Eh, Kevin, Wouldn't it be really bad if a generative AI company deliberately did something to

convince someone that their systems were sentient. You know, someone really credulous would accept whatever narrative said AI company was pushing, such as that they created a special job just in case AI was sentient. Genuine question, Kevin, when you walk past the mirror, do you start barking at it because you see another guy? Anyway, nothing about anything that open AI or anthropic is building or shipping suggests that we

are anywhere near any kind of autonomous computing. They've used the concept of AI safety and now AI welfare as a marketing term to convince people that they're expensive, wasteful software will somehow become conscious because they're having discussions about what to do if it does so, and anyone literally any report are accepting this that face Value is doing. Their readers are disservice and embarrassing themselves in the process.

If AI safety advocates cared about I don't know safety or AI, they'd have cared about the environmental impact or the fact that these models train using stolen material, or the fact that these models don't really deliver on their promises. And if they did, it would shock the labor market and it would hurt millions, if not billions of people. And we don't have anywhere near the social safety network to support the ones we have right now, let alone

in this completely fictional future. These companies do not care about your safety, and they don't have any way to get to AGI. They're full of shit, and it's time to stop being honest that you don't have any proof that they do anything that they say they will. Also, by the way, I think the bubble might actually be bursting. Yeah, remember in August of last year I was talking about

the pale horses of the AI apocalypse. Well, one of the major warning signs that the bubble was bursting was big tech firms would be reducing their capital expenditures and This is a call I've made quite a few times, and there was one in alarming Clarity from April fourth, twenty twenty four. And I'm going to quote myself here. Well, I hope no, that's the wrong voice. Well, I hope

I'm wrong. The calamity I fear is one where the massive overinvestment in data centers is met with a lack of meaningful growth or profit, leading to the markets turning on the major cloud players that state their future and unproven GENERATIVEAI. If businesses don't adopt AI at scale, not experimentally, but at the core of their operations, the revenue is simply not there to sustain the hype, and once the market turns, it will turn hard, demanding efficiency and cutbacks

that will lead to tens of thousands of job carts. Well,

we're about to find out if I'm right. On April twenty first year, who Finance reported that analyst Josh Beck said that Amazon's generative AI revenue for Amazon Web services would be five billion dollars five billion dollars this year, a remarkably small sum that is not profit, by the way, and also are dropping the bucket compared to Amazon's projected one hundred and five billion dollars in capital expenditures in twenty twenty five, it's seventy eight point two billion dollars

in expenditures in twenty twenty four, or it's forty eight point four billion dollars in twenty twenty three.

artificial intelligence capacity for its cloud segment Amazon Web Services AWS. Well, shit, I bet investors are going to love this. Better save some money, Andy, what's that?

of loys or sqq's. Now, some asshole is going to say lwys and sqqs aren't a big deal, But they are. They are. Go listen to the Power Cut episodes. Go listen, Go back and listen to them right now, Get off my how'd you get in my house?

Another report from a friend of the podcast read people I email, occasionally asking for a PDF, of course, referring to analyst td CO and put our report last week that, while titled in a way that suggested there wasn't a pullback at all, actually said that there was. It was called like hyperscaled demand is up.

deals in the market appears to have moderated. In plain English, this means demand has come down, there's less urgency to build stuff, and the market is also slowing down. Cohen also added that it observed a moderation in the exuberance around the outlook for hyperscale at demand, which characterized the market this time last year. Brother, my brother in Christ, isn't this meant to be the next big thing?

that Microsoft's run rate demand has accelerated materially. For those of you wondering, it means that they're not getting any fucking revenue demand for generative AI. Well, at least Meta an Oracle aren't slowing down right well. TD Cohen also reported that it received reverse inquiries from industry participants around the potential slow down and demand from Oracle, leading to the analyst to ask around and find that there had been a near term slow down in decision making, admit

organizational changes at Oracle. That it adds that this might not mean this is changing its needs of the beat it which it secures capacity. And if you're wondering what else this could mean, you were correct in doing so, because slowing down traditionally refers to a change in speed. Yeah, even the analysts are kind of like trying to dance

around this. It's kind of sad. TD Cohen also adds that Meta has continued demand, which means that they're buying more stuff, albeit with less volume of megawat signings quarter over quarter, then adding that Meta's data center activity is historically being characterized by short periods of strong activity followed by digestion. In essence, Meta is signing less megawats of compute and has in the past followed these kind of

aggressive buildouts with fewer buildouts. It doesn't sound good, does it. It doesn't sound like we're cooking and now we're going to get to and the whole thing's been kind of defensive.

haters a question if I'm wrong. How exactly am I wrong? I don't know, man, All of this seems all this stuff sure seems like the hyper scalers are reducing their capital expenditures at a time when tariffs and economic uncertainty are making investors far more critical of revenues. It sure seems that nobody outside of open AI is making any real revenue on generative AI, and they're certainly not making

a profit. It also seems at this point it's pretty obvious that generative AI isn't going to do much more than it does today. If Amazon is only making five billion dollars in revenue from the literal only shiny new thing it has sold on the world's premiere cloud platform at a time when businesses are hungry and desperate to integrate AI, then there's little chance this suddenly turns into

a remarkable revenue driver. Amazon made one hundred and eighty seven point seven nine billion dollars in their last quarterly earnings, and if only five billion dollars of that is coming from AI.

and model access. The Information reported that Salesforces Agent Force bullshit isn't even going to boast sales growth in twenty twenty five, in part because it's pitching it as a digital labor that can essentially replace humans with tasks, and it turns out that it doesn't do that very well at all, cost two dollars a conversation and requires paying Salesforce to use its data cloud product. What if anything

suggests that I'm wrong here? The things have worked out in the past with things like the Internet and smartphones, and that surely that's going to happen with GENERATIVEAI and by extension, open AI. That companies like Uber lost money and eventually worked out. And I've actually written a thing I'll link to about that. You can get it in episode notes. Is it that Open Eye is growing fast and that somehow discounts the fact that it burns billions of dollars and does not appear to have any part

of the profitability? Do you think that agents will suddenly start working and everything will be fine. It's a fucking joke. I'm tired of it. I'm really, I'm just I've tried to be like intellectual, I've tried to explain it nicely, and I'll probably still continue, but I'm just kind of fucking tired of it. I'm not going to stop doing this, by the way. If anything, I'm more galvanized by my rage. My aura ring is going to claim I did a

workout these episodes. It's great, I'm burning calories in real time. But large language models and their associated businesses, in my opinion, are a fifty billion dollar industry masquerading as a trillion dollar solution for a tech industry.

compute because they don't have anything else to do. Large language models are boring, unprofitable, cloud software stretched to the limits, both ethically and technologically speaking as a means of kind of keeping text collapsing growth eer going, and open AI's nonprofit mission has been fattened up to make fois graph for SaaS companies to upsell their clients and cloud compute companies to sell GPUs at an hourly rate. The rot

economy has consumed the tech industry. Every American tech firm has been corrupted by the growth of or cost mindset, and thus they no longer know how to make sustainable businesses that solve real problems, largely because the people that run them haven't experienced them for decades. As a result, none of them were ready for when Sam Moultman tricked them into believing he was their savior. Generative AI isn't about helping you or me to do things, or even

about replacing workers. It's about making uskus new monthly subscription costs for consumers and enterprises new ways to convince people to pay more for the things they already have used in slightly different ways that oftentimes end up being worse. Only an industry out of options would choose this bubble, and the punishment for them doing so will be grim. I don't know if you think I'm right or not. I don't know if you think I'm insane for the

way I communicate about this industry. Even if you think I am, think long and hard about why it is you disagree with me, and the consequences of me being wrong or right. There's nothing else left after generative AI. There are no hypergrowth markets left in tech SaaS Companies are out of things to upsell. Google, Microsoft, Amazon, Andmeta do not have any other ways to continue your own growth, And when the market works that out, there will be

hell to pay. Hell that will reverberate through the valuations of at the very least every public software company and many of the hardware wants to I have no idea how this ends, and I can't see how any of it works out well for anyone. In any case, I'll be here to tell you whether it does or not. And I must say I love doing the show so much, and thank you for humoring me when I experience brain madness every week.

to check out our reddit. Thank you so much for listening.